I'm brand new to REI and starting to practice analyzing deals for single family flips. My biggest struggle so far is coming up with rehab estimates. I know a general rule of thumb in $5/SF for light, $10-15/SF for medium, $25/SF for heavy, but I'm curious how or if this skews in the DFW market.
Hoping some of you wouldn't mind sharing the square footage multipliers that you use. Just looking for quick and dirty estimates for now, but I'm definitely open to recommendations on other methods to get more specific numbers. I accept any and all advice!
Real Estate Agent · North Dallas, TX · Member since 2021 · 8 posts · 5 votes
4y
Hey David!
I actually like to approach it the same way as Maurice. Ideally, if you're close with your contractor I would bring him along to showings to mentally tally a rough estimate of cost together (he may see red flags you don't and vice versa). If not, I always like to be prepared with "bucket costs" ie) a mid-level kitchen reno (15k-20k), bathroom rehab (10k), basic pricing for floors based on sq foot, etc. That way, when you walk the property you can add it as you go.
As for figuring wether a property is worth further analyzing, definitely run your numbers to determine how much you're willing to put in, and what your goal is for the return. It'll be pretty clear if a property is a good possibility when you have that bottom line in mind while walking properties.
Would love to chat more about it if you want to connect!
Coppell, TX · Member since 2015 · 485 posts · 310 votes
4y
I don't know if a blanket sq/ft cost would give you an accurate number. I tend to like the type of rehab rule approach better. X for kitchen, Y for a bath and add ons like roof, A/C etc which are easier to close in on as far as value.
That being said, you could refine "Kitchen" with small Kitchen rehab 10K, mid size 15k etc (making numbers up). but get a lot more accuracy that way.
I don't know if a blanket sq/ft cost would give you an accurate number. I tend to like the type of rehab rule approach better. X for kitchen, Y for a bath and add ons like roof, A/C etc which are easier to close in on as far as value.
That being said, you could refine "Kitchen" with small Kitchen rehab 10K, mid size 15k etc (making numbers up). but get a lot more accuracy that way.
Hi Maurice,
I completely agree and understand what you are saying. I'm trying to find a good method for a quick, surface level assessment to determine if a property is worth further analyzing - One that is adjusted for the Dallas market. I definitely wouldn't want to make a decision without diving deeper and getting more specific and accurate rehab costs. Do you have any tools or resources that you use personally that you would be willing to share?
Real Estate Agent · North Dallas, TX · Member since 2021 · 8 posts · 5 votes
4y
Hey David!
I actually like to approach it the same way as Maurice. Ideally, if you're close with your contractor I would bring him along to showings to mentally tally a rough estimate of cost together (he may see red flags you don't and vice versa). If not, I always like to be prepared with "bucket costs" ie) a mid-level kitchen reno (15k-20k), bathroom rehab (10k), basic pricing for floors based on sq foot, etc. That way, when you walk the property you can add it as you go.
As for figuring wether a property is worth further analyzing, definitely run your numbers to determine how much you're willing to put in, and what your goal is for the return. It'll be pretty clear if a property is a good possibility when you have that bottom line in mind while walking properties.
Would love to chat more about it if you want to connect!
They pretty much already answered how to get accurate rehab estimate costs.
I would like to just say that $5/ft won't get you anything. All of those numbers are extremely low and will never work for estimating any rehab in DFW. If you connect with me I will share an in depth excel worksheet with you that breaks down EVERYTHING. From the cost per sq ft of flooring to getting a new HVAC unit.
Hey All, I am similar to Alex but old school 21 page cost estimate. It is necessary to first time each year to establish base numbers for $ft of each item and labor costs. Most contractors will share there numbers with you. After 50 years in the Dallas mkt building new custom and productions homes, several years with apartments condos, a little for full development, 5 acre high end townhomes. Lots of remodels, libraries, kitchens, baths plus a cabinet shop. 6 years kitchen design sales, 3 as a factory rep. I also, have constructed several check lists that becomes a schedule based on the critical path method. Happy to share. I know of other rehabbers that have excel sheets as well for average size houses in this market area.
Real Estate Agent · Dallas/Fort Worth, TX · Member since 2019 · 78 posts · 35 votes
4y
I take Alex's' approach and I'd recommend you do the same. Start a spreadsheet with all necessary items of a home (you could even include sub-lines of high, mid, low grade) and spend 30 minutes on homedepot.com just to get an idea of what things cost these days. You don't want to go off a general rule of thumb for repairs. Having a general idea of what things cost will allow you to recognize a reasonable quote by your contractor from an astronomical quote.